Repaying Medicare When Your Personal Injury Claim Is Settled

9 March 2015
 Categories: , Blog


If Medicare pays for any of your medical expenses for an injury or illness associated with a personal injury claim, once the claim is settled, you must repay Medicare. If you don't, Medicare will charge you some hefty penalties on top of what you owe. Your attorney and the insurance companies involved also could find themselves being hit with penalties under the Medicare Secondary Payer Act. That's why most insurance companies won't issue a settlement check until you've negotiated the Medicare lien and know what amount you are required to repay.

Inform Medicare of Your Personal Injury Claim

As long as you don't delay for too long and contact Medicare before funds from the settlement are distributed, there's a good chance you can negotiate down the lien. Although insurers usually are willing to reduce a lien by the percentage you owe for attorney fees, Medicare often will do better. Medicare also takes into account other associated costs you pay to win a personal injury settlement.

If Medicare pays for medical treatment related to the accident during the personal injury claim process, let your attorney know. Your attorney will inform you from the start that you are responsible for repaying Medicare once your case is settled.

Steps to Take in Preparation

Keep a record of all the billing statements and receipts you receive from medical providers during that time. Compile all Medicare Summary Notices listing the medical services providers billed to Medicare and the amounts Medicare paid. When the time comes to negotiate, you will need to separate the charges for any medical treatments or services you received not related to the personal injury claim. You aren't responsible for repaying those.

What Happens After You Inform Medicare

It can takes months to receive a reply from Medicare after you contact them to report the personal injury claim. You or your attorney will need to request a conditional payment letter showing any payments Medicare made for medical care you received related to the injury.

When you do hear back, you will receive a Medicare Conditional Payment lien notice along with detailed billing histories. The conditional payment letter may include Medicare payments for unrelated medical treatments. You can dispute those by providing Medicare with documentation detailing the injury related to the personal injury claim. Be sure to include the date of the injury. Ask Medicare—in writing—to remove any unrelated charges.

What to Do After Your Personal Injury Claim Is Settled

Notify Medicare immediately once your personal injury claim is settled. You will also need to provide Medicare with the following information:

  • Settlement date

  • Settlement amount

  • Copy of the settlement agreement

  • Information of the insurance company paying the personal injury claim

  • Copies of billing statements showing attorney fees and costs

Once you receive Medicare's final demand amount, you must pay it within the time Medicare specifies or else interest will begin accruing. If you disagree with the amount Medicare requests you repay, you can appeal in writing.